By Stephen Kaufman
The U.S. Department of Labor’s jobs report for the month of February showed that 246,000 Americans were hired for new jobs, and the U.S. unemployment rate dropped two-tenths of a percentage point to 7.7 percent, the lowest recorded level since December 2008.
Alan Krueger, chairman of the White House Council of Economic Advisers, said in a March 8 statement that the employment report “provides evidence that the recovery that began in mid-2009 is gaining traction.”
Krueger said the U.S. economy “has now added private-sector jobs every month for three straight years, and a total of 6.35 million jobs have been added over that period,” as it continues to recover from the 2007–2009 economic recession.
The U.S. economy is a crucial engine for growth in the global economy, and movements in its gross domestic product, international trade levels, employment and monetary policy are closely monitored by world governments and international financial markets. World currency markets also monitor U.S. economic activity because the U.S. dollar acts as the reserve global currency that underpins the 24-hour-a-day foreign exchange market that links to the flow of global investments.
The Labor Department report, based upon a household survey, showed that in February employment rose notably in professional and business services, adding 73,000 jobs, followed by construction (48,000), health care (32,000), leisure and hospitality (24,000) and retail trade (23,700).
Krueger said the U.S. manufacturing sector added 14,000 jobs in February, for a total of more than half a million jobs during the past 37 months, which he said is the most for any such period since 1986. He also said the construction sector has added 306,000 jobs over the past two years, while state and local governments have lost jobs, especially in the education sector.
The chairman noted that monthly employment and unemployment figures “can be volatile, and payroll employment estimates can be subject to substantial revision,” so it is important to consider each report within the context of other available economic data.
According to a March 8 Associated Press report, the U.S. economy is benefiting from the Federal Reserve’s continued strategy of keeping interest rates at record lows, which is making it easier for Americans to buy homes and cars and for companies to expand.
In response to the 2007–2009 financial crisis and recession, the Fed cut the official interest rate it pays to banks to effectively zero percent, and has purchased more than $2.5 trillion in mortgage and Treasury debt. The Fed plans to continue purchasing $40 billion in mortgage-backed securities and $45 billion in Treasury securities each month until the U.S. unemployment rate improves to 6.5 percent.